London City Airport Stuck in Limbo as Politicians Debate Heathrow Expansion

Kari Lundgren, Bloomberg

- Sep 26, 2015 3:00 pm

Skift Take

London’s mayor and the U.K. Prime Minister need to stop playing politics and think about what makes most sense for London, which is probably an expansion of Heathrow given the growing number of international travelers.

— Dan Peltier

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London City Airport, offered for sale by its U.S. owner, has seen its growth plans fall victim to a political spat over the expansion of the U.K. capital’s Heathrow hub, Chief Executive Officer Declan Collier said.

Mayor Boris Johnson’s decision to veto a 250 million-pound ($380 million) proposal for aircraft stands, a taxiway and arrivals terminal, seven years after approving extra flights that the infrastructure would serve, stems from deep splits among policymakers over aviation strategy, Collier said in an interview.

While the CEO says he’s confident planning permission will be granted on appeal, the case won’t be heard before March. That means bidders being solicited by Global Infrastructure Partners must make an assessment without being sure City can reach a target of 6.5 million passengers a year by 2023.

“Boris is the man who gave us permission to increase annual flights to 120,000, and now he’s the man who is stopping us putting concrete on the ground,” Collier said. “All I can surmise is that he feels that if he’s opposing the development of an airport in west London, how can he support the development of an airport in east London. I don’t think they’re comparable.”

Size Differential

London City, six miles from the main financial district, attracted 3.65 million passengers on 75,000 flights last year, with the size of aircraft limited by its short runway and noise curtailed by rules requiring steep takeoffs and landings. Heathrow, Europe’s busiest airport, had almost 471,000 flights and lured 73.4 million customers.

Johnson’s office said in a statement that the mayor had withheld planning permission because developing City would increase disruption from aircraft without being of “greater benefit” to the U.K. capital, while confirming that the Heathrow case had colored his thinking.

“‎He has long argued that Heathrow airport cannot be expanded due to the increased noise it would lead to in west London, and he is not willing to expose east London to additional noise,” the statement said.

Bid Interest

Collier declined to give a valuation for London City or comment on possible buyers, while reporting “significant” bid interest. Owner Global Infrastructure Partners, which also runs London Gatwick, bought the terminal from Irish businessman Dermot Desmond for 750 million pounds in 2006.

“Of course a bidder is going to come in and look at all the commentary that is in the air around planning,” he said. “But I don’t think it’s an issue for most. We’re in an appeal process and we’re confident we’ll get the right result.”

Johnson’s own plans for a completely new airport in the Thames estuary were undermined when a state-appointed commission recommended Heathrow as the best site for a new runway in July. David Cameron’s Conservative government has said a final decision will be reached by the end of the year.

While the mayor is also a Tory, he and the prime minister are not close allies, with Cameron said to prefer other potential successors as premier, a factor that loads the already sensitive airports debate with added significance.

“I think we’re unfortunate victims of a broader political discussion happening at Boris’s level and perhaps above the London level,” Collier said. “City’s appeal is on hold after an edict from Johnson compelling Newham council to block the expansion plans triggered public consultations.”

This article was written by Kari Lundgren from Bloomberg and was legally licensed through the NewsCred publisher network.

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